Spool DAO Unveils V2 Upgrade for Institutional DeFi Access

• Spool DAO unveils transformative V2 upgrade.
• Spool’s innovative V2 is tailored for financial institutions. 
• The DeFi sector has seen rapid growth in 2023. 

The decentralized finance (DeFi) sector has been a focal point of innovation and growth within the cryptocurrency industry. Amid this landscape, industry players seek to bridge the gap between the dynamic world of DeFi and the more established realm of traditional finance.

Most recently, Spool DAO recently launched its V2 upgrade, geared towards offering institutional access to DeFi. The upgrade features advanced customization options, comprehensive risk assessment tools, and a suite of user-friendly features.

Spool DAO’s V2 Upgrade for Institutional DeFi Integration

Spool DAO claims its V2 upgrade, launched on November 21, 2023, represents a significant step in connecting traditional financial institutions to DeFi. This upgrade is a comprehensive response to the needs of institutional investors, addressing key challenges and streamlining their entry into DeFi.

Multi-Asset Smart Vaults form the cornerstone of Spool’s V2 upgrade. These vaults allow institutions to build diversified investment strategies using multiple assets. This feature caters to institutional investors’ varying investment preferences and risk profiles.

Another critical aspect of the upgrade is the introduction of Smart Vault Guards. These controls allow institutions to dictate who can deposit or withdraw from the vaults, ensuring adherence to regulatory standards like KYC and AML.

The V2 upgrade also incorporates customizable actions, enabling institutions to apply specific settings for user activities in their Smart Vaults. This feature includes options such as deposit and withdrawal fees and automated asset swaps, mirroring operational elements that traditional financial players will be familiar with.

Moreover, the update will enable support for Liquid Staking Derivatives (LSDs). LSDs offer placeholder tokens for staking cryptocurrency, adding flexibility and liquidity to the staking process, which is crucial for networks like Ethereum—this support particularly benefits institutions, allowing them to participate in staking activities without the usual constraints. 

Institutions will also benefit from advanced automation, which includes rebalancing assets between various strategies. This reduces the manual effort typically required in DeFi asset management. 

Lastly, the update features deposit NFTs (dNFTs) for added security. These NFTs act as receipts for investments in smart vaults, streamlining the withdrawal process and providing a transparent mechanism for managing investments.

DeFi Revenue Expected to Reach $16 Billion in 2023

The DeFi market is witnessing a remarkable surge across the globe. In 2023, revenue in the DeFi market is projected to reach approximately $16.96 billion . This upward trajectory is expected to maintain momentum, with a forecasted annual growth rate (CAGR) of 19.60% from 2023 to 2027, culminating in a projected total revenue of US$34.7 billion by 2027.

The user base in the DeFi sector is also set to expand significantly. By 2027, DeFi users are expected to reach 9.33 million. Regarding market penetration, the current figure is 0.11% in 2023, with a slight increase projected to 0.12% by 2027.

The growth of DeFi is influenced by several factors, including stricter centralized exchanges (CEX) regulations and more widespread crypto adoption. Most recently, Binance’s major settlement has shown that US authorities are ready to crack down on centralized players. This leaves more space for DeFi applications. 

The potential approval of Spot Bitcoin ETFs (Exchange-Traded Funds) is another factor driving DeFi growth and pushing for more crypto adoption. 

On the Flipside

• The increased regulatory attention, while driving growth in some areas, also brings uncertainty. This can affect the stability and predictability of the market, impacting investor confidence.
• The DeFi space has been prone to technical issues and security breaches , which can be significant barriers to entry for traditional financial institutions.

Why This Matters

With the rise of DeFi, the power traditionally held by centralized financial institutions is being redistributed, potentially leading to a more democratized financial landscape.

Read more about the hacks that plagued DeFi recently: 
Top 5 Hacks That Rocked DeFi in 2022

Read more about what’s behind the record gas fee spent: 
Bitcoin’s Record $3.1M Gas Fee Sparks Debate in Community